20 March, 2017

Demystifying Alexander Nahum Sack and the doctrine of odious debt

Eric
Tousaint’s study of the odious debt doctrine

by
Eric Toussaint

Part
10 - The USA’s repudiation of the debt demanded by Spain from Cuba
in 1898

The USA
declared war on Spain in the middle of 1898, and sent their navy and
troops to liberate Cuba from the Spanish yoke. Spain was defeated and
negotiations between the two countries began in Paris in order to
reach a peace agreement, finally signed in December 1898.

During these
negotiations, the Spanish authorities defended the following
position: since the United States had taken their colony, they were
obliged to honour Cuba’s debts to Spain. Such were the rules of the
game. And indeed the rules cited by Spain did constitute common
practice in the 19th century. A State which annexed another state
must assume its debts. Sack gives several examples of this.

The United
States refused, saying it was not their intention to annex Cuba. In
substance, they declared: “We liberated Cuba and gave assistance
to independentists who had been fighting you for several years.”

The Spanish
answered that if Cuba became independent, it must repay the debt, as
had all the other Spanish colonies that had become independent during
the 19th century.

The United
States categorically rejected Spain’s demand of payment from Cuba.
Finally, Spain signed the peace treaty with the United States and
gave up on recovering the debt.

The most
common version of the narrative of what took place tends to suggest
that the United States rejected Spain’s debt claims against Cuba
because that debt had served to maintain Cuba and the Cuban people
under the Spanish yoke. But when we analyse the content of the
negotiations, the explanation is very different. Admittedly, the
United States advanced this argument, but it was only one among many
others they used to justify their position.